Weekly Cotton Market Update – Week 12, 2026

MSP funding backs cotton farmer support:
The Cabinet has approved Rs 1,718.56 crore for CCI’s 2023-24 cotton MSP operations, covering procurement of around 32.84 lakh bales and benefiting about 7.25 lakh farmers. The support was extended across 11 major cotton-growing states through more than 508 procurement centres to prevent distress sales and protect farmer returns.
This matters because MSP-backed procurement helps keep cotton acreage viable and supports steadier raw material flows into ginning and spinning. Net-net, this suggests that the government is still using CCI as the primary buffer to protect farmers' economics when market prices fall below the MSP.

Textile exports rise as policy support widens:
India’s textile and apparel exports, including handicrafts, rose 7% during April–December 2024 versus the same period a year earlier, while the sector targets a $350 billion industry and $100 billion in exports by 2030. Policy support included zero customs duty on ELS cotton from February 20, 2024, 51,000 tonnes of duty-free ELS imports under the India-Australia ECTA, and a $3.50 per kg MIP on knitted fabrics. The cotton linkage is direct because cheaper ELS access can support premium yarn and fabric production, while FTAs and PM MITRA parks can improve textile export competitiveness. Expect cotton demand to stay linked not just to crop size, but to how effectively mills convert policy support into export orders.

CAI lifts 2025-26 crop estimate again:
CAI has revised India’s 2025-26 cotton production estimate upward to 320.50 lakh bales of 170 kg each, from 317.00 lakh bales earlier, marking an increase of 3.50 lakh bales. The revision was linked to better crop prospects in states including Maharashtra and Andhra Pradesh. A higher crop estimate points to a more comfortable cotton supply outlook for ginners, spinners, and exporters if arrivals track projections. This suggests that lint prices may stay more contained than feared, unless actual arrivals or quality diverge from the estimate.

Compliance becomes a cotton export strategy:
India’s $176 billion textile industry is being pushed toward traceability and compliance, with Union Budget 2026-27 support of Rs 1,500 crore for integrated upgrades. The article said three to five model villages were being rolled out in each cotton district, bale-level traceability was being built through a blockchain-backed BITS system with QR codes, and exporters were earning premiums of up to 25% for 60/40 banana–organic cotton blends in US and French markets. This matters because cotton is moving from a volume play to a documented, premium-linked raw material strategy tied to export access. Net-net, this suggests traceability and compliance may increasingly determine which cotton value-chain players capture better margins.

North yarn firms as export pull tightens supply: 
Cotton yarn prices in North India rose by ₹2–5 per kg in Delhi and Ludhiana during the week as mills shifted more output toward exports amid a weaker rupee, tightening domestic supply. Recycled PSF prices also increased by ₹2–3 per kg, while recycled PC yarn in Panipat stayed stable, and cotton prices remained firm on global cues and export demand expectations. The cotton signal here is that export-led mill behaviour is supporting yarn realizations even without a sharp move in lint costs. That likely means domestic buyers may continue to face tighter yarn availability and margin pressure if export demand stays stronger than local offtake.